PM's pay to crack $500k as part of MP salary rise

The Prime Minister's annual salary will top half a million dollars for the first time as part of a pay raise for all MPs.

The Remuneration Tribunal announced on Thursday all MPs were entitled to a pay increase of 2.4 per cent from July 1 this year and has left the door open for a further pay raise within the next 12 months.

The latest pay increase for MPs means the base annual salary will increase from $190,555 to $195,128. Photo: Tamara Voninski

The tribunal - an independent statutory body - said its recommendation was below the trend in wages growth over the past year but it had taken a "conservative and incremental approach" based on "a slowing in wage movements in the community as well as uncertainty regarding economic growth".

The pay raise means the base annual salary for MPs goes from $190,555 to $195,128.

"The remuneration for members of parliament is set entirely independently of government and of members of parliament," Ms Gillard said in Perth.

"I think that is appropriate that we don't have a political process. We have a non political process."

Last year the federal government changed the rules regarding MPs' pay.

Parliament no longer has the power to knock back or approve pay raises. Instead, the pay raises are automatic.

In a statement announcing the pay raise the tribunal said it "considers it important that remuneration in its jurisdiction is maintained at appropriate levels over the longer term to attract and retain people of the calibre required for these important high level offices".